FX.co ★ Japan 10-Year Yield Declines on Safe-Haven Demand

Japan’s 10-year government bond yield declined towards 1.5% on Monday, continuing its decrease from the 16-and-a-half-year highs observed last week. This shift was attributed to increased demand for safe-haven assets, prompted by investor concerns over new US tariffs. Over the weekend, President Donald Trump reiterated his intention to implement reciprocal tariffs on all nations and reportedly encouraged his advisors to adopt a more assertive approach to trade. On the domestic front, investors analyzed mixed economic indicators: industrial production in Japan exceeded expectations in February, while retail sales failed to meet forecasts. Regarding monetary policy, the summary from the Bank of Japan's March meeting reinforced the belief that the central bank will persist in raising interest rates, as long as its economic and inflation outlook remains stable. Policymakers highlighted that rising wages and increased consumer spending are maintaining price gains, thereby supporting further steps towards monetary policy normalization.